What is a mortgage repayment calculator?

What you’ll learn

• How a home loan repayment calculator works
• How to use our mortgage repayment calculator 
• Advanced variables 
• Your repayments: shown as a table or a graph
• What difference could extra repayments make?
• Other mortgage calculators

 

When you take out a home loan, it’s almost always a sizable financial commitment. So it’s important to understand the full costs associated with the loan, how it’s structured, and how it reduces over time.

 

How a home loan calculator works

A home loan calculator works out your repayments for a mortgage by crunching the numbers you put in. You enter the details of a loan in to get a result. The four vital data points are:

 

• The size of the loan – how much you need to borrow. For instance, if the home is $500,000 and you have a 20% deposit, the loan would be 80% of the purchase price of the home, or $400,000.  
• The interest rate – this will depend on current rates, which you can find here on our rates page. 
• The loan term – how long it will take you to pay off the loan. Typically, this is 25 to 30 years. 
• The type of loan – whether you are paying principal and interest, or interest only. An interest-only loan is usually only for a limited time. 

 

With all these data points entered into the home loan calculator, it will show regular repayment amounts, and break down all the repayments over the life of the loan. It will also show you how much interest you will pay over the whole loan. These calculations will be estimates only, so they can provide a guide. You will get exact costs when you complete a full home loan application.

 

How to use our mortgage repayment calculator 

A mortgage repayment calculator is a great tool for seeing the impact of various scenarios. Here’s an example:

 

You plan to buy a house with a value of $750,000. You have a deposit of $150,000, or 20% of the purchase price. Your loan will cover the remaining $600,000, which is 80% of the house price. 

 

Using this information, the mortgage calculator shows what your repayments could be each month. (Use the dropdown menu to show weekly or fortnightly repayments.)

 

 

By adjusting the variables, you can see the impact of different changes. For example, if you had a 25% deposit ($187,500), your loan would be $562,500, so your repayments would be lower:

 

 

Or, if you reduce the term of the loan from 30 years to 25 years, you would be mortgage-free five years earlier, but your repayments would be higher:

 

Remember that the online calculator provides estimates of your likely costs. Exact costs, including fees and charges, will be made available to you once you complete a full home loan application.

 

Advanced variables

There are some variables that might be useful in certain circumstances.

 

• Reason for buying: If you select ‘To invest in’, higher investment property interest rates apply.
• Repayment type: ‘Principal & Interest’ will help you repay your home loan faster. ‘Interest only’ might have a higher interest rate but could help lower your monthly repayments for a set time.
• Interest rate type: Your interest rate type could have a big impact on the total cost of the loan. Enter a fixed rate and term if you want certainty your rate will not change or variable if you prefer more flexibility.
• Interest rate and comparison rate: This automatically populates with current variable (floating) rates plus a comparison rate based on an example loan, but you can manually enter a rate. The more precise you can be here, the better.

 

Your repayments: shown as a table or a graph

The section below the repayments calculator shows how your loan is paid off over time, broken down so you can see the full interest costs. There are two options to display this information:

 

• View as Graph: This illustrates the loan principal reducing over time, and if you hover over each year, you can see the payments broken down.
• View as Table: This sets out payments year by year, with total interest charge and principal still owing.

 

Here’s what the graph view looks like for the 30-year, $600,000 loan, when you hover over year 1:

 

 

And here’s the same information presented in table form, for years one and two (although all years are included if you use the arrows to move through the full table):

 

What difference could extra repayments make?

When you make regular extra repayments on your loan, it can have a big impact on the lifetime cost and time it takes to repay the mortgage. Even a single lump sum repayment can change the equation. This section of the home loan calculator allows you to play around with repayments and see what difference you can make to your loan.

 

For example, if you round up your mortgage repayments to the nearest hundred dollars, here’s what it looks like:

 

 

You would be mortgage-free months sooner and save in interest repayments. Use the slider to see how a larger or smaller overpayment could change the total cost and duration of your home loan.

 

This is an estimate for your guidance; exact calculations for your mortgage may vary depending on your individual details and any additional fees and charges.

 

Other mortgage calculators 

In addition to our mortgage calculator, you can use a range of other calculators to help you analyse your home loan situation.

 

For example, you can estimate what size mortgage you could afford to service using this calculator: How much can I borrow? 

 

This calculator gives you two options: affordability calculator and maximum loan calculator. 

 

The affordability tab: this lets you enter an amount you could comfortably repay, based on what’s left over after paying all your expenses. However, when considering these expenses, you could subtract your current accommodation costs since those will stop once you move into a new house.

 

The maximum loan calculator tab: this asks you to enter your circumstances and outgoings, then provides you with a potential maximum home loan amount.